Archives: MFN News Items

Read the full report here.

Summary of financial performance

• Net sales for the quarter totaled SEK 172 thousand (4,438). Sales for the quarter comprised revenue related to Dosell sales. In previous years, this item also included revenue attributable to the Security business area, which has been sold.

• Operating income for the quarter totaled SEK -7,219 thousand (-5,139).

• Income after financial items for the quarter was SEK -8,891 thousand (-5,459).

• Cash flow for the period was SEK 10,789 thousand (-7,467).

• Earnings per share for the quarter, basic and diluted, were SEK -0.3 (-0.2).

• Equity per share at the end of the period was SEK 0.6 (1.0).

• The equity ratio at the end of the period was 52.2 percent (58.4).

• During the quarter, the company secured ongoing access to working capital through the agreement of a credit facility corresponding to SEK 14 million.

Important events in the quarter

• As a result of iZafe Group’s successful pilot projects in 2020 together with partners, pre-orders were received for 450 Dosell 2.0 medication-dispensing robots. The 2.0 model was developed in the first quarter and is starting to be produced in the second quarter with ongoing deliveries.

• iZafe Group’s Italian partner has begun active marketing and negotiations with a large number of pharmacies in northern Italy. In addition, equipment that packages medication in sachets has been installed at a number of pharmacies.

• The pilot project with care service provider Attendo has been completed with good results. A phase of developing Dosell is now underway in close dialogue with Attendo to reach more users in the long term.

• The pilot project with care service provider TioHundra has been completed, with promising potential for the future. Overall, the Dosell medication-dispensing robot has been assessed to be a good solution for supporting day-to-day work at TioHundra.

• iZafe Group has conducted a test period with potential Dosell users in order to start supplying a consumer version of the service from spring 2021.

• iZafe Group has decided to expand the distribution of information to shareholders and other stakeholders to supplement the communication of important events and regulatory news in line with applicable regulations. The distribution of information is being expanded via the iZafe website for continual updates that are not subject to disclosure rules.

• In January 2021, iZafe Group raised just over SEK 4 million through the exercise of series TO 8 B share warrants from the rights issue carried out in 2019. The CEO and Board exercised all their share warrants.

Important events since the end of the quarter

• iZafe Group issued 1,000,000 share warrants (TO9) in connection with the agreement of a credit facility in April 2020. All share warrants were subscribed for, raising SEK 2.6 million for the iZafe Group before issue expenses.

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Comments by the CEO
The ongoing pandemic has continued unabated in Sweden, which in the short term has posed challenges for us, as it has been difficult for our customers to prioritize the practical introduction of Dosell in organizations that support the elderly. Confidence in Dosell as an important building block in a future digitalized healthcare system, in which the dispensing of medication using a dispensing robot is key in a healthcare system, is greater than ever. The pandemic continues to highlight the importance of introducing new technology that not only makes things easier for care providers but also improves safety for users.
 
Interest and belief in Dosell as a key function in this system remain significant and are growing. Our partners have confidence in Dosell as a product and by year-end 2020 we had approximately 450 pre-orders for Dosell 2.0, which was developed in the first quarter and is starting to be produced in the second quarter, with ongoing deliveries. The updated version of Dosell has a range of improvements and new features that make it even better and much more competitive, including a new integrated rechargeable battery with a battery time of more than 48 hours and an enhanced app.
 
During the first quarter we intensified development and training efforts together with our partners to prepare the roll-out of Dosell 2.0. Development is based on close cooperation with our partners, as well as with a number of operators in Sweden and Finland with which we have conducted successful pilot studies. Commercial production of Dosell 2.0 is planned for the end of May for subsequent delivery to our partners and customers based on the pre-orders we have received.
 
As part of our long-term strategy to position iZafe Group as a leading player in the digitalization of medication management, we are also launching a consumer version of Dosell in spring/summer 2021. The launch will create an entirely new private-sector market consisting of the approximately 220,000 people who already take medication using medication sachets and the 500,000 people who medicate manually using, for example, Dosett containers.
 
In the first quarter we focused significantly on our products, with major investments and development costs having a negative impact on income and cash flow. But like all product and development companies, we assume these costs in order to build our long-term competitiveness. We have secured financing to implement the production of Dosell 2.0, the launch of a consumer version and for the marketing of Dosell. Over the next few quarters we will gradually switch our focus from product development to marketing and sales efforts and the launch of Dosell Consumer, with a significant campaign through relevant channels. Expanding our recognition through our own marketing and through partners in the Nordic region and Italy will increasingly mean pitching ourselves as the leader in the medication-dispensing robot market. 
 
Both Apoteket AB and Kronans Apotek offer medication sachets and are continuing to establish the concept, for both private and public health care. Growing awareness of the health risks relating to incorrect courses of treatment or failure to comply with treatment is beneficial for our company. Together with pharmacies, we want to boost medication health and safety for the elderly. Dosell is a safe solution, both for those who want to ensure compliance with treatment and to be certain that combinations of medications work, but also for those who need reminding and want relatives to be involved so they can take action if medication is missed. 
 
Our shareholders have requested more company communication, so we have created a dedicated web page for company updates. I would also remind you to follow our social-media channels for information in addition to what is provided in our press releases. 
 
Early in the year, we performed a market survey through the public opinion and research data firm YouGov. A total of 2,063 men and women aged 18+ in Sweden were surveyed via online interviews during the period of 26 February – 3 March 2021. The survey is representative of the Swedish population and gave us valuable insights into the market.

• Of the 60-year-olds who take medicine daily and use a technical solution, 70 percent use dosette boxes. We see that these users can be transitioned immediately to dose-packed sachets so that they will no longer have to sort and keep track of their medicines.

• 43 percent of all respondents aged 60+ who take medicines daily have a positive attitude towards technical solutions that will enable them to independently take the right medicines at the right time.

• 82 percent of all respondents aged 60+ who take medicines daily think it is very important to take their medicines safely, meaning in the right dosage and at the right time. 

• Of all respondents aged 60+ who take one or more medicines more than once a day, 87 percent say that safety of medication administration is very important.

To sum up, I am really pleased with everything we have achieved with the development of Dosell 2.0 in the first quarter and am confident about 2021 and the gradual return of normality thanks to the vaccination program. I believe the launch of Dosell 2.0 will allow us to achieve the breakthrough we want after the summer, providing many people and their relatives with greater freedom and safety.
 
We have all the necessary factors in place in terms of personnel, processes, partners and a competitive product that is ready to capitalize on the market potential ahead of us. We are more excited than ever about our future growth opportunities. We expect the business climate to improve in 2021 as the ongoing vaccination program allows health care to gradually take the step from pilot projects to full-scale introduction.

Read the full report here.

Condensed statement of financial performance

• Net sales for the quarter totaled SEK 84 thousand (4,471). Sales for the quarter comprised revenue related to Dosell sales. In previous years, this item also included revenue attributable to the Security business area, which has been sold.

• Operating income for the quarter totaled SEK -9,128 thousand (-7,173).

• Income after financial items for the quarter was SEK -9,127 thousand (-7,514).

• Cash flow for the period was SEK -6,270 thousand (7,462).

• Earnings per share for the quarter, basic and diluted, were SEK -0.3 (-0.3).

• Equity per share at the end of the period was SEK 0.9 (1.3).

• The equity ratio at the end of the period was 84.0 percent (51.4).

Significant events during the year

• iZafe Group sold the Security business area, thereby becoming a pure, financially strong life sciences company focused on the Healthcare business area and the medication-dispensing robot Dosell.

• As a result of successful pilot projects during the year, iZafe Group’s partners have placed initial orders for 450 medication-dispensing robots for 2021.

• iZafe Group’s Italian partner has begun active marketing and negotiations with 2,000 pharmacies in Italy. Equipment that packages medication in sachets has been installed at a number of pharmacies.

• A pilot project was initiated with the care service provider Attendo. The goal of the project is to obtain data to make a decision on the potential implementation of the Dosell medication-dispensing robot for use in Attendo’s home services business.

• A pilot project was initiated with care service provider TioHundra AB involving 30 medication-dispensing robots. The results will help identify areas where welfare technology can contribute to more efficient and safer operations at TioHundra in Norrtälje Municipality, Sweden.

• iZafe Group published a patent application that the company submitted relating to the further development of the Dosell medication-dispensing robot. The application is international and will enable iZafe Group to have patents approved in over 150 countries.

• Two pilot projects were initiated in two Finnish municipalities together with partner Vivago. In addition to these initial pilot projects, Dosell will be included in a number of tenders in Finland in 2021.

• Cooperation has begun with Doro in Sweden as a direct result of successful collaboration with Doro in Norway.

• A partner agreement has been signed with US-based international healthcare company Hippo Technologies to develop an end-to-end medication-dispensing service based around the Dosell medication-dispensing robot.

• iZafe Group announced that the company will start delivering a consumer version of Dosell in spring 2021. This strengthens iZafe Group’s position as a leading developer of digital medication dispensing at home by offering hundreds of thousands of patients, relatives and healthcare workers the Nordic region’s first consumer version and the market’s safest, most user-friendly and cost-effective medication-dispensing robot.

Significant events after year-end

• In January 2021, iZafe Group raised just over SEK 4 million through the exercise of series TO 8 B share warrants from the rights issue carried out in 2019. The CEO and Board exercised all their share warrants.

• The pilot project with care provider Attendo has been completed with good results. A phase of developing Dosell is now underway in close dialogue with Attendo to reach even more users.

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Comments by the CEO

The year 2020 was an eventful and exciting year for iZafe Group that was marked by four main issues:
1) creating the structure and foundations for future financing of the business by raising capital at the start of the year and selling the iZafe Security business area;
2) investment in expanding our partner network and collaborating on pilot projects;
3) continuing to develop and adapt Dosell technically and making adjustments for new markets such as Italy and Finland; and
4) managing the effect of the coronavirus pandemic on our market and business.

Despite the significant negative impact, it is encouraging to see that the pandemic has boosted interest in greater patient safety and, for us, the Dosell medication-dispensing robot. Decision-makers and opinion leaders have realized the importance of digitalization in healthcare to provide safer elderly care.

iZafe Security was successfully sold in the middle of the year to free up resources to accelerate the commercialization and internationalization of the Dosell medication-dispensing robot. The sale resulted in iZafe Group becoming a debt-free company with an effective capital structure, paving the way for faster growth both organically and through acquisitions. Following the sale we started working on becoming a leading pure life sciences company within healthcare digitalization in Sweden and worldwide. In January 2021, we raised approximately SEK 4 million from a subscription program in conjunction with the rights issue that we carried out at the end of 2019.

Covid-19
The ongoing global pandemic has had a major impact on public health and the global economy, and there is still uncertainty over when to move from pilot projects to full-scale introduction. Local restrictions on certain markets have affected our ability to interact with customers and a number of pilot projects have experienced delays. iZafe Group adapted quickly to the changes in the market by putting in place digital management lines and methods, including for training of new and existing partners.
I’m pleased with how effectively we have maintained contact with our customers and partners, and that together we have successfully conducted extensive testing and pilot activities. We are seeing increasing demand for digital solutions to ensure the health and safety of the elderly. We are continuing ongoing efforts in product development and improvements to provide even better solutions, while remaining focused on constantly adding new benefits for existing customers and partners.

Dosell launching as a consumer product
As we announced at the end of the year, spring 2021 will see us launch a pure consumer version of Dosell. The very limited test launch carried out over five working days in December showed very significant interest, particularly through the considerable response we saw in the communication channels we used. We are extremely confident about the launch of Dosell Consumer and are developing a new, simplified Dosell service tailored to the private-sector market. The main investments have now been made and development costs will consequently decrease over the current and future financial years. The launch of Dosell Consumer will initially take place through our own e-commerce solution combined with selected partners, primarily pharmacies. At a later stage we will also offer consumer versions in Norway and Finland through our partners.

Partners
Norway
Together with our partner Hepro in Norway we won the largest ever national tender for digital assistive technology. Meanwhile, the deployment of Dosell at around 50 care service providers has started in the first of 30 municipalities in which our partner Doro has already implemented its welfare platform.
Finland
We have initiated three pilot projects in Finland with our partner Vivago, in addition to which Vivago is to include Dosell in a number of tenders during the year. Some 60,000 people in Finland already receive their medication in the form of medication sachets and these are a key target group for Dosell. The number of people in Finland who take medication using sachets is expected to grow sharply over the coming years.
United States
It is especially heartening to have signed an agreement with our first really big international partner, US-based digital health company MyHippo. Together with MyHippo we will develop a service based on the Dosell medication-dispensing robot for customers around the world who use Hippo’s products and platform. We plan to expand the partnership to also include an OEM version of Dosell.
Italy
We are excited about the launch as part of Sempli Farma, a pharmacy-based service that connects attending physicians with users and their relatives through a closed medication-dispensing system. The Italian medication sachets have been validated with Dosell and intensive advanced business discussions are underway with wholesalers and pharmacy chains in northern Italy, representing around 2,000 pharmacies. We can expect to see Dosell in Italian homes in 2021.

Organization
Our employees have adapted quickly to the new reality of working from home and have focused firmly on our objectives, despite the challenges faced. We have invested in bringing in new skills, and welcomed two new colleagues in the autumn who have extensive experience from care service providers TioHundra and Attendo. They have already helped us improve processes to put in place the right conditions to ensure we can provide the support our partners expect.

Summary
We are concluding a phase in which we have gone from product development, identifying sales channels and streamlining the company, to starting 2021 with a strong emphasis on sales through our growing network of partners and other channels. A number of partners have confirmed their confidence in Dosell by making pre-orders corresponding to 450 Dosells with integrated battery, which will be produced on an ongoing basis from the end of Q1. As we begin 2021, we have new, trained partners not only in Sweden and Norway, but also in the US, Finland and Italy. Our partnership strategy will prove its worth in 2021, and we will continue to invest in our business model of selling through partners. iZafe Group’s Dosell Consumer and future patents could revolutionize health care at home, especially for users who want to live safe, independent lives at home for longer.

Our extensive partner network in Sweden and internationally, combined with our launch in the spring of a simplified Dosell service for the consumer market, establishes firm foundations for growth and I am very confident that iZafe Group as a company and Dosell as a product will move into a commercialization phase across a number of markets.